Investing In First-Year Associates: They’re Worth It.

The Wall Street Journal asked this morning, “First-Year Associates: Are They Worth It?” The answer is, only if you feel like growing your firm. First-year associates may be costly, but they are essential to a firm’s innovation and advancement.

Unfortunately, corporate clients don’t necessarily want to invest in your firm’s future.

In a September survey for the WSJ by the Association of Corporate Counsel, a bar association for in-house lawyers, more than 20 percent of 366 in-house legal departments polled refused to pay for the work of first- or second-year attorneys, in at least some matters.

This survey demonstrates a rising trend where clients and the heads of law firms no longer want to pay high hourly fees to newly employed law school graduates.

Almost half of the companies surveyed—which range in annual revenues from $25 million to roughly $4 billion—told the WSJ that they instituted these policies during the past two years.

The survey confirms news that has become problematic for law firm professionals for some time now.

“A combination of the legacy of financial crisis and higher rates for junior associates—$200 or $300 for an hour’s work, which typically includes research, proofreading or culling important documents from boxes of paperwork—appear to be driving trend,” reports Joe Palazzolo in his article in the WSJ.

“The line is simple: Chief legal officers don’t want to absorb the costs of training newly minted lawyers.”

This trend has lawyers and law firm managers questioning new associate training and hiring methods. Can first- and second-year associates earn their stripes by learning to be productive sooner? Or, will these associates just become write-offs by law firms for helping employ previously unemployed workers?

The WSJ proposed a solution focused on more intensive first-year training. R. Bruce McLean, the chairman of Washington, D.C.,-based Akin Gump Strauss Hauer & Feld LLP, told the WSJ that if the trend continues, “firms will have to find a new solution, perhaps a new billing model or intensive training programs similar to those in the U.K., where prospective solicitors take a one-year course on legal practice followed by an apprenticeship.”

But, for firms, more complete training is a positive change. It’s vital to the growth of a firm and should already be happening with them.

So, what else can law firms do to avoid paying high costs for young associates?

Besides exhaustive training programs, firms should adjust their billing model. There should be a more widely graduated scale for hourly fees between junior, senior, and partner attorneys. And, recent graduates should learn to expect lower annual salaries.

In exchange, law firm mangers and managing partners should make it clear that senior attorneys should be mentoring junior ones. This way, junior associates get training and senior associates eventually get better help.

With this in mind, firms should be giving new associates more opportunity and responsibility. With experienced paralegals and senior associates abound, there will be ample time to double-check their work.

Plus, in today’s suffering economy, law school grads are more eager and hungry to prove themselves. You’ll be surprised by the high-quality work and new ideas they can produce.

Training does cost the firm in the short-term, but it should pay two-fold in ideas, support, and partner-track associates in the long-term.

Finally, don’t forget to introduce your legal team to your clients—the entire legal team.

Once your client becomes familiar with the names and faces (or at least voices) of his legal representatives, he will likely feel more comfortable paying for their services. After all, he shook their hand. They were enthusiastic, knowledgeable, and ready to win his case.

This will also give younger associates much-needed experience working directly with clients (see comment on training above).

Economic recessions bring out new trends and changes in every industry. The field of law is no exception. Usually, a recession increases competition and efficiency among rival firms.

So, ensure your firm survives by embracing innovation in billing matters, hiring processes, and training programs. And, increase its efficiency by collaborating (not fighting) with your clients over ideas for best practices when they have questions over legal fees for those pesky first-year associates.

The fresh perspective and technological know-how of the younger generation will lead your firm into the future.

-WB

 

Learn about retention best practices, solid training and mentoring programs, and alternative compensation packages to attract best-in-breed talent, experience higher retention rates and increased profitability in C4CM‘s box-set course, “Associate Advantage Resource: Best Practices in Associate Management.

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